PACRA Maintains the Entity Ratings of H.A.R Fibres (Pvt) Limited

The ratings of H.A.R Fibres (Pvt) Limited (“H.A.R Fibres” or “the Company”) reflect its adequate standing within the spinning segment of Pakistan’s textile industry. The Company operates with an installed capacity of approximately 20,000 spindles, primarily producing carded yarn. The product portfolio comprises coarse-count yarn ranging from 4s to 30s, offered in three principal blends: Cotton, Polyester-Cotton, and Viscose, catering mainly to the domestic market. The Company fulfills its energy requirements through grid and a 1MW solar plant.
The Company maintains a diversified raw material procurement strategy. A substantial portion of its key inputs, including polyester, viscose, and lyocell fibers, is sourced from international suppliers, primarily in China, Thailand, and Indonesia. The remaining raw cotton requirements are met through local sourcing from Sindh and Punjab. This procurement mix provides flexibility in managing input availability, while exposing the Company to external supply dynamics and foreign exchange movements. During FY25, the Company’s topline declined by ~10.5%, reaching PKR 832mln (FY24: PKR 930mln; 6MFY26: PKR 436mln). The decline in revenue reflects prevailing demand dynamics within the spinning segment and competitive pressures in the domestic yarn market. Currently, the Company’s sales are entirely concentrated in the local market, with no export contribution.
From a financial risk perspective, the Company’s liquidity profile is supported by moderate coverage indicators, providing adequate support to meet its working capital requirements. The capital structure remains conservatively leveraged. The Company’s outstanding borrowings displayed an easing trend, indicating a strategic reduction in debt exposure. The sponsors’ experience and demonstrated ability to navigate challenging industry cycles remain supportive factors for the ratings. Going forward, the Company’s ability to broaden its customer base, improve operational efficiencies to support margins, and sustain a prudent financial risk profile will remain important considerations. Strengthening and formalizing the governance framework would enhance oversight and decision-making processes, which, in turn, is expected to support the sustainable growth and overall performance of H.A.R Fibres.
Pakistan’s textile exports increased to USD ~17.3bln in FY25 (FY24: USD 16.7bln), reflecting a recovery led primarily by value-added segments, while the spinning segment continued to operate under a highly competitive and margin-sensitive environment. The progressive decline in policy rates provided relief to financing costs, improving cash-flow dynamics and offering some cushion to debt-servicing metrics across the sector. In parallel, energy efficiency initiatives, particularly solarization, have emerged as a key structural differentiator, enabling relatively stronger cost positioning and margin resilience for companies with early investments in renewable energy.
The ratings are dependent upon the management’s ability to improve margins, profitability, and financial profile of the Company. This includes keeping the debt levels manageable and improving the business profile of the Company, going forward. Improvement in the governance framework remains important for the ratings.

About the Entity
H.A.R Fibres (Pvt) Limited ('H.A.R Fibres' or 'the Company') was established in 2018. The Company is engaged in the manufacture and sale of yarn and operates a single spinning unit. Mr. Shahid Mehmood Sheikh owns a ~40% shares of the Company. While the remaining stake is equally divided among his sons: Mr. Haroon Shahid, Mr. Faizan Shahid & Mr. Adan Shahid. The Board is chaired by Mr. Shahid Mehmood Sheikh. Mr. Shahid is also the Chief Executive Officer (CEO) of the Company and is assisted by an experienced team.